How Sprint collects and resells millions of cell phones

After nearly 10 years of running a cell phone buyback and recycling program, something just wasn't working right for Sprint.

“We found that we didn't have a great, and certainly not as high as we'd like, uptake,” said Darren Beck, Sprint's director of environmental initiatives. “The only thing we were rewarding customers for was bringing back old Sprint and Nextel devices.”

In return, customers only could get a credit to put against their next bill.

Fast forward a few years and, after a major overhaul of its recycling program, Sprint took in more than four million wireless devices in 2012. That shift was fueled by a system that gives up-to-date values on phones, collects devices from any company and gives customers money they can spend on more than just bills.

The program, facilitated by eRecyclingCorps (eRC), also has saved Sprint more than $1 billion a year by bringing still-functioning and re-sellable phones back into Sprint's hands.

Making changes

Sprint's original recycling program launched in 2001, but it wasn't until 2009 that it tried something new by piloting eRC's system, which allows store employees to look up any phone to see its current market value. Sprint keeps its own phones that can be resold and sends all other phones to eRC for reuse or recycling.

“We needed an IT solution we could put into our stores,” Beck said. “That's where eRC comes into the picture.”

Sprint wanted to expand its program to include any phone, but needed a way to get instant access to the values of phones to best determine how much credit customers should receive.

Another key part of the system, Beck said, is giving customers instant credit they can use on other wireless devices, accessories or their bills. Beck said Sprint will pay up to $300 for some devices.

“That's what happens when you can put a valuation on a phone that is dynamic,” he said.

Being able to offer credit instantly when customers come to stores to buy new phones is another key, he said. “You have to strike when the iron's hot."

Add it up

In 2010, the first full year running eRC's system, Sprint took in 870,000 devices. That number bloomed to 4.1 million in 2012 and the system is now in 3,500 Sprint stores and authorized dealers. Four out of 10 in-store transactions include phone buyback, Beck said, and by the end of 2012, Sprint was collecting more than four devices for every 10 that it sold. The company aims to collect nine for every 10 it sells by 2017.

Beck said those figures primarily were made possible with the new recycling model and eRC's IT system. And because retail store employees receive commissions on total sales, they have a high incentive to promote the program to customers. The more phones customers sell back to Sprint, the more credit they have to spend at the store and the higher the commission employees receive.

“Our retail representatives are some of our best ambassadors now,” Beck said.

While Sprint is one of eRC's biggest customers, eRC works with nine other wireless companies and is in more than 15,000 locations in 10 countries.

ERC has helped complete more than 10 million trade-ins since its founding in 2009, and in May, the company hit a milestone of its own by facilitating 1.1 million phone trade-ins during a single month. That puts eRC well ahead of other phone buyback programs, such as Gazelle, which takes in phones by mail and collected its millionth device after five years. EcoATM, which operates take-back kiosks, brought in its millionth device after three years.

“They key to the milestone is a targeted, focused strategy,” said Kelly Carnago, eRC's chief of carrier operations. “We really targeted where we think most of the transactions are taking place and where the opportunity is.”

ERC's agreement with each of its customers varies. Some, like Sprint, keep their own collected phones and send other phones, along with non-refurbishable phones, to eRC. Others just send everything they collect to eRC, which then sorts out the refurbishable phones from those at the end of their lives, which are shipped out to partners that remanufacture or recycle them. Carnago said about 95 percent of all phones collected are reused.

“Our focus," she said, "is on making as many phone as possible resellable."

Sprint phone image by Michael Saechang via Flickr